Alibaba shares rise after central bank orders revamp of affiliate Ant Group

The People’s Bank of China has asked Ant Group to restructure into a financial holding company

Regulators have ordered Alibaba’s financial technology affiliate Ant Group to revamp its business, sending the e-commerce giant’s Hong Kong shares to close 0.43 per cent higher.

That, along with a 18.23bn yuan ($2.78bn, €2.3bn, £2bn) fine Alibaba received as a result of an anti-monopoly investigation by regulators, removed skepticism for investors.

Hong Kong-listed shares of Alibaba rose about 4 per cent at the open but pared those gains throughout the day. Alibaba’s US-listed shares closed over 9 per cent higher on Monday but were about 1.6 per cent lower in pre-market trade.

Alibaba owns a roughly 33 per cent stake in Ant Group, which runs the popular mobile payments app Alipay in China. 

In November, regulators forced Ant Group to suspend what would have been a record $34.5bn initial public offering (IPO) in Hong Kong and Shanghai.

At the time, changes in the financial technology regulatory environment were blamed for the suspension of the listing.

What is your sentiment on BABA?

80.07
Bullish
or
Bearish
Vote to see community's results!

That came just days after founder of Ant Group and Alibaba, Jack Ma, made some comments that appeared critical of China’s financial regulator.

In December, the People’s Bank of China (PBOC) ordered Ant Group to rectify its business. And on Monday, the Chinese central bank outlined details on what the company needs to do.

The PBOC asked Ant Group to restructure into a financial holding company. Ant Group must also create more separation between its payment app Alipay and its credit products. 

Yu’e Bao, Ant Group’s money market fund, must also be reduced in size, the PBOC said.

FURTHER READING: Alibaba shares soar even after accepting $2.8bn antitrust fine

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Currency Com Bel LLC or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.
iPhone Image
Trade the world’s top tokenised stocks, indices, commodities and currencies with the help of crypto or fiat
iMac Image
Trade the world’s top tokenised stocks, indices, commodities and currencies with the help of crypto or fiat
iMac Image